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tv   QA  CSPAN  September 26, 2016 6:00am-7:01am EDT

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♪ announcer: this week on "q&a," author and "washington post" columnist robert samuelson. he talks about his columns and the economic performance of the united states under president obama. brian: robert samuelson, how would you describe what you do for a living? robert: i've been reporting about the economy since the late 1960's. i write a column for the "washington post" writers group. one of the columns appears in "the washington post" and other papers. one of them appears mostly on the internet, the other appears in the newspaper and on the internet. brian: what do you want people to learn from your columns?
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robert: my view is that i'm trying to learn something new in every column. i don't always succeed, and i'm trying to explain things the -- to people, so that even if they disagree with me, which they often do, they will come away with more information. i think it would be failing if people do not learn something from most of my columns. brian: do you have a political approach? do you come from a certain ideology? robert: i would not say i have any particular ideology. i am slightly right of center. not mainstream, right of mainstream.
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i am not pushing a partisan agenda. to the extent i push an agenda, it is mine and not a party agenda. in most cases, not even any of the major senators or representatives, which makes blame me over the years. i don't detect that what i have written has influenced people to do anything good or bad. brian: is there a column that has gone more reaction over the years? robert: i have to go back and think about that. when i write about social security and medicare, which is what the government provides older americans like me, i get a pretty large reaction. i've been writing about this for over 20-30 years. my basic theme has been, this is going to essentially squeeze out the spending on older people, which are now growing disproportionate to the total population. it is going to squeeze out spending on other groups or result in large tax increases.
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that this is essentially unfair to younger americans to revise these programs. they are part of the social fabric and are important, the we need to have higher eligibility ages and introduce gradually and slowly, have less generous than if it's for the wealthy. and we ought to modernize the programs and where we have not done. we have not done it essentially for political reasons because older americans are a very large group and they are politically acute. many of them feel, not without reason, that they have then promised benefits by the government and the government them, right to reduce even by a penny. brian: we asked you to come because the column, i have read it for years, it always has good numbers in there so we can try to figure out what is going on. i have a ton of numbers. i've got a lot of your columns from the year and i want you to explain this. first thing i want to put on the screen is the united states population for the last eight years.
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basically,y -- --king sense barack obama talking since barack obama has been president. there they are. it started in 2009 with 307 million and we have gained up to the present that we have at least 324 million people in the united states. when you see the kind of growth rate, does it mean anything? robert: to me, it is an optimistic thing. it means the united states is still growing as a body of people. it is a very big country. we have room for a lot of people. if you look at some other advanced societies, they are not growing, they have birthrates that are less than two for each adult woman. and so, if you have two adults and one offspring, pretty soon the population goes down the end -- and it gets older. you have a problem, it seems to me. you have a welfare state that needs to support its older
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population but it has a shrinking economic base because the number of new workers coming into the system is less than the number of older workers were exiting the system. so you have a system that is basically fixed to fail. that is not the case in the united states. we have the same problems but they are not as acute. if you look at italy or germany or japan, their birthrate is a little bit above one. in 40 or 50 years, they are essentially not going to have very many young people left in relationship to the older population. this is a huge political problem.
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i think it underlies some of the problems we see in europe today, slow economic growth. they have aging societies and basically cannot produce the kind of sustained economic growth that countries with a growing populations have. i don't want to give the impression that this is the only thing that matters, it obviously is not. you can have large numbers of poor people. historically, as countries have gotten richer, their birthrates have gone down. got richer, their birthrate of gone down. so the population by itself is not a good thing, but in conjunction with economic growth is a sustainable model. brian: a foreign-born u.s. population, we only have it up to 2014. but it shows we have 42.2 million foreign-born up to 2014, and that is when the population is only 319 million. but what about that ratio? any other countries in the world have that kind of population? robert: i don't really know the comparison with other countries. i think with this says about the united states is that having immigrants has been a great thing for the united states. in fact, the country would not exist without them. on the other hand, absorbing the immigrants and assimilating them into american society is not an
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easy task. it has never been easy. it seems to me that is the fundamental reason why we need to curb illegal immigration and we need to reorient our immigration policies have more skilled immigrants coming in you an easier timee assimilating and contributing to american growth and the american fabric. but i think in general, this is a healthy thing as long as we can, to some extent, control it. we cannot control entirely, but more than we have. and i think the united states has a tradition as part of the political culture and economic culture, of absorbing immigrants. that bodes well in the long run. but people forget, or they don't register enough on both sides of the argument, we have assimilated millions of millions of immigrants in the past, so we should be optimistic about our
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capability of doing it now. but on the other side, there is always social tensions with immigrants when we have waves of them pulls top so just the notion that you have unlimited immigration seems to me a formula for failure and is bound to create the kind of reaction to the inflow of immigrants that we see today, which is in its worst forms quite ugly. in its mildest forms is understandable. brian: how far you go back in your own family when family was immigrants? robert: this is something i want to research more and i have not researched enough. on both my mother's and father's sides, their fathers came in the 19th century. now, on the other hand my wife's , parents immigrated from what is now a i think latvia to the
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united states, so my wife is a first generation immigrant. brian: how about your family, where they come from? robert: germany and russia. what is now germany and russia. brian: and you grew up where the united states and where did you go to school? robert: i grew up in white plains, new york. i went to public school through seventh grade and went to private school in massachusetts and went to harvard as an undergraduate. brian: i've asked you this before, we might as well get it on the record, you are not related to paul samuelson. you are not his son or any relation? was onepaul samuelson of the most eminent economists. i'm not related to him. although he does have a son. robert j samuelson. he had a good sense of humor as well as being a brilliant economist. "newsweek" hired me in the 1980's to write a column that he
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had previously written, and he noteme a very little nice saying -- i think it was one line, someone named samuelson can't be all bad. brian: more numbers. we have a lot of numbers in this show. this is -- and we're talking about the time barack obama has been president mostly, from 2000 9-2016. this is average gas price per gallon. this is what has happened to the average gallon of gasoline. and you see on the screen. it went up in 2012 to as high as $3.68, and is now down to $2.06 on an average from a day-to-date basis nationwide. this may be off five cents or six cents. robert: i think with this table shows you is that we don't control oil or gasoline prices in any sort of obvious way or you would not have these huge fluctuations.
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at one dollar or $2.50 forever. secondly, what you see in the trend is that in 2009, we were in the midst of the great recession, which was a consequence of the financial and so people were driving less. companies were producing less. this was a worldwide phenomenon. since gas and oil are worldwide commodities, there were depressed prices. as we recovered from the great recession, prices went back up. they got up over $100 per barrel for crude oil. you had two things happening, you had sort of the introduction or expansion of oil shale production in the united states in both the midwest and texas with fracking, which increased our capacity dramatically, so supply was increased.
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and then you had the breakdown of opec and production, huge production of gasoline and oil by saudi arabia. so the supply basically overwhelmed and prices went down again. brian: before we go farther, what is your reaction without getting into the individuals, of the election season? what are your observations? robert: i am not sure i will share my observations, but i will share my opinions. i am a patriotic person. i think america is a great country. i am proud to be an american. i think anyone is lucky to be an american citizen. i have been pretty much proud of the united states most of my life. i am 70-years-old. i am not proud of the united states during this election. i feel this at kind of a gut level.
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i think donald trump stirs animosities and that is the wrong kind of campaign to run. i'm also not crazy about the fact that the democratic party produced a candidate who is widely mistrusted, and she must have something to do with it. the origins of that mistrust. but i am particularly bothered by the donald trump candidacy. we people in the ideas business, scholars, and whatever, we like to think we can resolve our problems if we simply have open and honest debate about them. that is a little bit naive. i discovered that early after i started writing a column. but it is not so naive to think that ideas would play some role in major elections, and yet in this campaign, a lot of it has boiled down to personal attacks and counterattacks. and it is pretty discouraging, frankly. brian: i want to go back and pick up on some of your columns from earlier in the year and read a paragraph and get you to
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tell us what you think has happened since. this goes back to january 31. robert: i hope i still believe what i said i believe. brian: it says the deficits are candidates are not talking about, and you say, just how far have budget deficits drifted off the radar screen in presidential politics? last week, the nonpartisan congressional budget office issued its annual budget and economic outlook report and hardly anyone paid heed. ityour column, you write -- is no secret why deficits are shunned. take away politics, raising taxes, cutting popular subsidies and handouts is unfriendly. people deplore deficits but they don't support the programs that create the deficits. robert: well, i agree with most of that. you know, we basically have a system that is built on the presumption of economic growth, that the economy will throw off
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enough additional income every year so that people can satisfy both their personal wants and public wants through the government. and, one of the problems of a slowing economy over the last 15-20 years is that you do not have the flood of increased income every year that had been anticipated. son of the deficits are fundamentally a reflection of the fact that the public does not want to be taxed more but it wants to receive more benefits, and the system basically gets them what they want. if we have faster economic growth, we can pay for some of these programs without cutting other programs or raising taxes, but because we don't have faster economic growth, we have to accept the large deficits, which we have done so far because it's the most ingenious and expedient thing to do. or we have to do the unpopular thing of raising taxes or cutting other programs. i think we need to do all of those things. in the event, we hardly done any of them. we don't know what the long-term
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consequences are of running up the national debt. it may be that the consequences are pretty mild or nonexistent. brian: let me put on the screen what you're talking about this, we have three figures from the debt from 1789 until the present. they go from 1789 until 2001. you can see that our debt was $5.720. and then during the george bush years, the debt increased $4.9 trillion more. and then in the barack obama years, it has increased $8.8 trillion, which at the to $19.5 trillion. what happened to us after 2001, where we would spend an incredible amount of money for the debt? robert: what happened, let me give you context. up until the late 1950's or early 1960's, there was a tradition in this country that you basically try to balance the budget in the good years, in the middle of a war or economic slump, you do not try to balance the budget, but the other times you try to balance the budget. what happened in the 1960's is we had new keynesian economists who said we can manipulate the budget in a way that will spur economic growth and we do not need to run surpluses all of the time. so the framework for running deficits was established in the 1960's, between 1961 and i think 1998, we ran one surplus, 1969. and, so the tradition is we changed our habit.
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we changed our national framework for discussing these things in a way that i think was undesirable. so i would not lame george w. bush or barack obama for the problem, it was there when they arrived. however, having said that, bush adopted tax cuts that he did not finance by cutting spending. he increased medicare by having an active drug benefit without paying for it. and, he had military operations abroad against saddam hussein the cost fair amount of money. he did not pay for that.
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so, george w. bush basically embraced the existing status quo of when you want something extra, just do it and borrow. and, it is fairly easy for the united states to borrow.
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people around the world want to hold something they trust, and for all the problems we have, we are more trustworthy than most other governments the world. we get to obama, who ran up the deficit much more than george w. bush. a lot of that you cannot blame on obama. because we went into this great recession and financial crisis. when you have a recession, spending goes up on unemployment insurance, food stamps, welfare, medicaid. the government also increases spending to try and revive the economy and put a flora under the decline. and even when there are tax cuts
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as part of a stimulus program. and it took a long time to recover from this recession because it was the worst recession since world war ii. so both bush and obama some extent were prisoners of the situation they did not create. on the other hand, they were willing participants in the existing budget game. obama failed in coming away with any sort of a major budget agreement which would curb future deficits. as i said, bush eagerly proposed and enacted tax cuts and spending programs he did not finance. brian: here is another chart on the federal budget.
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it just how much the budget spent during the obama years and how much the deficit has been. you go back to 2009, and it was $3.5 trillion.
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it looks like, and i know the numbers have gone up and down during the process, instead even on the budget side. lately, it is up to $4 trillion in the budget. when barack obama started, the deficit was 1.4 join dollars. you can see it kept going down slightly, and then this year the production is $616 billion deficit. what is the difference between the budget and the deficit, and does it matter? robert: the budget, to make this chart clear, you might've just put spending up there. that is the spending part. you don't have a column for revenues, but if you have called for revenues, you would basically take revenues away from spending and that gives you the deficit. i would say in the first three or four years of obama's administration, much of that deficit, they were very large over the years, much of that reflects the stimulus program, about $800 billion, and what are called automatic stabilizers which i mentioned earlier without giving them a name. that is the tendency to spend more in a recession. either by giving tax breaks or taxing less because people are making less. so there taxes are less will stop so as the economy recovered, the stimulus disappeared and essentially declined to very small terms. the reviving economy provided more revenue for the government and less of the automatic stabilizers.
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still, the $616 billion was actually revised last week. we are near full employment, to have such a big deficit, that is a lot. does it make any difference? that is one of the real problems of the politics of debating deficits, we really don't know what the dangers of long-term deficits are. there are 3-4 dangers that are typically repeated when people are debating this. one is it may be that we can finance the deficit we have people arether words willing to lend to the government because they trust the government, but if we have some huge new national need, a major pandemic or war, as social collapse that requires untold billions or trillions of dollars, we may not find it so easy to borrow when we are starting with a large debt. the second major complaint against large deficits is that it will wheeze out private investment as the government
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goes to borrow more, interest rates will rise and crowd out private investment. private investment is supposedly good for the economy to have and encourages higher productivity and higher living standards. so this will be a negative for us in higher living standards. those are two of the main arguments used against. but we don't know at what point this becomes a danger. and, the fact that there are no adverse immediate consequences to having high budget deficits makes it difficult to argue, for people to argue -- well, raise my taxes or cut my programs because i know these deficits pose some sort of problem in the future and i don't want to put that on my children.
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that is another argument against deficits, you are basically putting the consequences of today spending on your children and grandchildren, who will have to pay the interest on the debt used. there is another argument used, again, this is theoretical and has not come to pass. that is that we will create some sort of a financial crisis. at some point, we are borrowing so much the people will not want to lend to the united states anymore, and they will either dump dollars or treasury securities. it will create a vicious circle where interest costs are a lot more than you when they were when interest rates were low and do not pay it, it will create a crisis, because there is so much debt there. brian: this is what you wrote in march. is the u.s. economy stronger than we think? perhaps, you say.
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a persisting puzzle about its recent performance is a stark contrast between growth of jobs, which has been unexpectedly robust, and the growth of the economy's output, which has been unexpectedly weak. how can an economy produce so many jobs? the puzzle would disappear if the economy's output is consistently undercounted. i want to put on the screen, you talked about this earlier, the u.s. unemployment rate and the u-6 rate. which i am sure you know the you-six rate. -- the u-6 rate. there is, back in 2009 at the beginning of the obama administration. today, the unemployment is in the area of 4.9%. you can see the u-6 rate has it was 16.3 back in 2009, it has come down to 9.7%. can you explain the difference? robert: the standard unemployment rate, it is now 4.9% and has been in that vicinity of 5% for many months, it essentially takes the number
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of people who want a job and are looking for a job and they are the unemployed. you have to be looking for a job, you cannot just want a job, you have to be looking for a job. to qualify for the official unemployment rate. for the u-6 rate, first it starts off with the standard unemployment rate, so 4.9%, and the addition of going to 9.7% includes people who have part time who would like a full-time job, people who say they want a job but have not looked for a job in the past year, discouraged workers, essentially. so, those are the two main categories of workers that are added in there. brian: let me put up another chart.
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robert: can i just say one thing. 9.7 looks pretty high, but even if the best of times, the rate never gets down to 8% or 9%. there is always this gray area. brian: conservatives often point to people who are not in the labor force. and what has happened to that. i want to put up a chart that shows you the average number of people who are not working. in 2009, it was 81.6 million. as you can see it just rapidly went up to the present, january, july, 94.1 million people are not working. robert: first of all, we do not wait understand what is going on there. a big chunk of that, probably the largest chunk, is baby boomers like me who have reached the age for social security and have retired. so there is a huge number of people retiring every day who are baby boomers who are entitled to retire and have reached the eligibility for social security and are able to retire at 62, which entails a
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somewhat of a cut of their benefits, or they can go to 66-years-old, which i think is now the official age for full benefits. that is a chunk of it. another chunky induced by the great recession and financial crisis, is when people saw the could not get jobs, they went back to school. so you have some people going , back-to-school. on top of that, you have a trend that seems to have begun in the early, the late 1990's or early 2000's, you had a huge increase in the previous 20-30 years of women in the paid labor force, and that seems to have stabilized and actually come down some, there are more people, more spouses staying at home they and their used to be. -- then there used to be. so you put those things together, and according to the studies, maybe you explain two thirds or three quarters of the increase of people not in the labor force. there is a chunk of it we just
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a quarter or a third or whatever, a chunk that we just do not understand what happened. maybe some of these people dropped out because they have disability insurance or they are just dropping out. we really don't know what happened. you annt to show interview that steve scully had with president obama when his administration started. it is 16 seconds long. i want to see what you have to say. >> you know there is a 1.7 trying dollar debt. at what point do we run out of money? well, -- obama: a point fromas at we had 11 trillion in debt and now we're up to 19 point 4 trillion.
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robert: i guess what he meant was, he meant we are spending all of the taxes we bring in and we are not taxing the difference. i think that is what he meant because otherwise it would not make any sense. runningyou say we are out of money that is actually not true when the hetero reserve can create money by its own operation it goes out and dies, and buys treasury securities in one way or another. of thin air.t so we can create dollars out of thin air whenever we want to dollars and the government can pay, as we have been discussing, the government can pay its bills by borrowing from itself. so, what he said, i'm sure he would not say that again today. he would say something that was more sophisticated, and i'm sure he knows better today. brian: well, how would you characterize his approach to the economy during his presidential
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term? robert: well, i would give the president either a b- or c+. i recall, he took office in early 2009, when the country was in the midst of a financial crisis, and what we subsequent recall the great recession, and i think he operated in that period of six to eight months, in that period he conceivably could have done better, but i don't see how he could have done better. he acted with a great deal of self-confidence and eloquence and explained things to people. i think he generated confidence. he let his economic lieutenants do what they thought needed to be done, and took some decisions which at the time were considered to be courageous, like saving the auto industry, which i think was the right thing to do. it's worth remembering, a lot of things obama did, george bush,
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george w. bush laid the foundation for, because he followed essentially the same path, but obama could have screwed it up. he could have spent all his time blaming bush and whatever, and he acted with a great deal of self-restraint and maturity, i think, and i think the historians will judge what he did favorably. after that, my opinion is not so hi, because he pursued policies that essentially were aimed at buttressing his reputation and legacy, and seemed to undermine general confidence in the economy. whatever you think of the affordable care act, known as obamacare, it was predictable it would be unbelievably contentious and i wrote a column before obama took office saying, please don't do health reform, or global warming right away, the economy is too weak, you
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need to buttress your confidence, social confidence in society. you know, wait until things are better before you go into this. i think he lost -- he did not lose track -- it was a deliberate decision he took, but he thought it would buttress his reputation. be i think he is going to disappointed when, when historians begin seriously writing about it. but i will say, obama is an incredibly lucid, eloquent leader, and no matter who is elected, particularly trump, but even hillary, they will be a step down. i would say that trump would not be a step down, but a couple of floors down. brian: let me show you a chart of membership of the u.s. house of representatives and membership of the senate, and what happened to the numbers on that. starting with the house, you go back to when barack obama was elected.
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257 democrats, 178 republicans. down through the years, up to the year 2015, it has flipped. other than his first two years, the democrats hung on until 2013, but if you go to the senate, you can see what's happening to the numbers over there. when he came in, there were 57 democrats in the senate, 41 republicans, and then you go to where it is now, 54 republicans, 44 democrats. any reaction to that? i know you don't write much politics. robert: i'm not a political sage, for sure. my theory of american politics is quite simple. when people don't like what's going on, they throw the party in power out and vote for the other guy, and they hope the other guys will do better, and sometimes that's unfair, because the other guys are doing as best
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as anybody could do, but i think that's what happened. and obama is charged with not really doing much to help the democratic party, and concentrating mainly on his own reelection. i don't report in this area. i don't know whether that's true or not. but certainly, what has happened in terms of the turning of the house and the senate, is consistent with that view. so, others who are more informed about this political landscape will have to settle this issue. brian: in march 27th this year in your column, you wrote, "we are a very wealthy society, and we should not forget it. donald trump along with many other people apparently has. visiting recently with the post's editorial board, here's how trump explained that he would limit overseas military commitments, including support for nato founded in 1949." i think we are not in the
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position we used to be, i think we were a very powerful, very wealthy country and we are a poor country now." robert: i understand what he's getting at, that we don't have the self-confidence we used to have, and that we don't have the resources to spend anything on anything. -- everything on anything that we want. but the idea that somehow we are a poor country is absurd. it is just a foolish statement. and if you were to become presidentf,f to say things like that, he would be miseducating the american public. we have a national income of $18 trillion, and we spend less than 3% if i recollect right, on national defense. at the height of the cold war, in the 1950's, we spent 9% or 10% of our income on national defense. we are so much richer, if you go back, think about 1945, 1950, at the start of the postwar era, and think about what people had, most people did not have cars. certainly most people did not have televisions. most people did not have air-conditioners. most people did not have microwave ovens.
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for sure, not only did most people not have personal computers or smartphones, they had never imagined them. they were buck rogers things. most people had not flown on an airplane. most people had not received penicillin, other antibiotics. you can go down a long list of things we have now that have practically raised our living standards. so the idea that we are a poor society is just absurd. brian: i want to put on the screen the budget of the department of defense since barack obama became president. 2009, $666 billion. and then you can see it went up a little bit, and came down in 2013 to $578 billion and now it 2016 it billion, and of course, as the years went on, of course, the inflation rate also. what's the average inflation rate?
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robert: right now, the average inflation rate if you don't count oil and food is about 2%. if you count, include oil and food its 1%. so inflation is very low. brian: what do you think of those numbers on defense? robert: i'm of the view we are not spending enough on defense, so i'm disturbed by them. we reducing the size of the army substantially, from i think a little bit less than 500,000 down to 350,000. i would have to check those numbers, but it is a substantial reduction. reducing the size of the navy. we face all these conceivable threats, not just terrorism, but cyber warfare, obviously china and russia have armed in a way that was probably not anticipated 10 or 15 years ago. if we want to deter military conflict, it seems to me we have to have a force that is capable of, that other countries will think, well, we don't want to do this, because if the united states mobilizes what it has, they will blow us out of the water, and i don't think we are spending enough, as you point out, not only is defense
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spending flat in nominal terms, but inflation would have eroded some of the spending power of those numbers. it is fair to also add some of the decline reflects disengagement from afghanistan and iraq, which were extensive commitments. whether or not we should have stayed longer in iraq, whether or not we could have, the same is true of afghanistan. historians will have to decide that. brian: you wrote on may 8, american consumers are not what explain the plodding economic recovery. it gets no respect, despite creating 14 million jobs and lasting almost seven years. -- gripe isght
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economic growth has been held to about 2% a year, as you just said, well below historical standards. the sluggishness reflects a profound psychological transformation of american shoppers, who have dampened consumption spending, affecting about two thirds of the economy. to be blunt, we have sobered up. robert: well, one of my views is that the great recession, the financial crisis, were social and economic traumas for the american people. something happened, they had been led to believe could never happen again, that we almost had uncontrollable economic crisis, it was not just a mile recession, but it was some ink that almost spun out of control. so people became a lot more precautionary, in my view. it doesn't mean they went into their shells, but the extra dollar they saved instead of spending, and that is also true of businesses, which is why we have, i think, weak business investment in this recovery, which is one of the reasons for the sluggish recovery.
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but we really don't know. there are lots of positive reasons for the slow recovery. american technology is lagging. i did a column last week about the possibility that just because we are an aging society, we may have slower growth. people, as they get older, and assume positions of responsibility in corporations, are more risk-averse than they used to be, and people don't change jobs as much, because they are afraid if they leave one job, the next job will not be as good, and if they leave that, they won't find a job, so they tend to be a little more cautious. there are all sorts of reasons why you can advance that the recovery has been slower. in fact, i have just -- my next column, which will probably appear after this program appears, repeats the problem that we have, that i wrote an earlier column about, that there is a discrepancy between the increase in the number of jobs, which has been fairly strong, and the increase in gdp, which is our output, which has been weak, and it is hard to reconcile these two things. brian: let me put on the screen another chart. this is gdp, and as we look at
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this, gross domestic product, you can see in 2009 gdp was $14.4 trillion, and today it has moved up to $16.4 trillion. what is gdp? it is used all the time by the news business. robert: gdp stands for gross domestic product, and people can think of that is our total output or production. and before the 1930's, we really , didn't have a statistic that was called gross domestic product. this was really a great advance in economic statistics. because if you think about it, first of all, it's an incredibly complicated economy, and you need to have surveys of lots of things he would not think of to -- you would not take up to sort of count what we produce. surveys of health care,
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automobiles, college tuition, you name it. somehow they have got to measure it. they also have the problem that you have a lot of businesses producing intermediate goods, you don't want to count it twice. if you have a chunk of steel that goes into a car, you don't want to count the steel and the car. because the car's value also reflects the value of the steel, so you just want to count the "value added," occurring at each level of the business, so that's a complicated process of filtering out the value one business provides to another business, and you don't want to count, you want to discount the -- just count the final product people are paying for, whether it is a service like going to a movie, or flying in a plane, or an actual tangible product like an automobile or dishwasher or microwave oven or whatever, personal computer, smartphone. brian: may 29, you wrote this --
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brian: and this chart is the weekly average earnings of the american people, going back to 2009. weekly earnings, $810 a week, and today $852 a week. that is average. of course, we don't know, that is a statistic, we are not absolutely sure what that all means. but tell us about your -- robert: first place, if you look at this, it says in "$2016," which means it is adjusted for inflation, so this should be the actual purchasing power of the average weekly earnings. that's number one.
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number two, i think that that column concerned a study that i ran across that showed that the small increase, the small year-to-year increases in average and median wages were to some extent explained by shifting demographics, that you had people in my generation, baby boomers, who were well paid and were retiring, leaving the labor force, and they were relatively high paid, and you were substituting for them younger workers just entering the labor force, and they were lower paid. so when you substitute lower
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paid, younger workers for higher paid, older workers that tends to drag down the median average wages. the point i was making, things are not quite as bad, conventional wisdom has been wages are going up very slowly after inflation, and that's true. but the point i was making, if you look at the wages of any particular worker, it may be going up more, because this is an arithmetic effect, shifting from older workers who are retiring and have higher wages. that drags down the, the average wage, when you substitute, when you replace them with younger workers who have lower earnings. i hope i am not the two confusing here. but it is essentially a demographic process, which does not reflect the reality individuals see. brian: here is a chart about something you talked about during this hour, social security cost-of-living adjustments. you go back to 2009, and the adjustment that year was 5.8%. in other words, if you are on social security, you get a bump of 5.8%. there are three years of the last eight where you got no increase in the cost of living. back in 2010, 2011, it was 3.6%, and then 1.7%, 1.5%, and 2016,
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people our age are not getting any increase in social security. you don't hear any talk about that at all in the news. robert: well, they don't get any increase in social security because basically inflation has been close to zero. now, i think in each of these years, inflation was positive, and i have forgotten what the threshold is where they don't give anything, 1% or 2%, if inflation -- and there is some feeling among economists that our price indexes overstate actual price increases, that they do not for technical reasons count improved quality and undercount new goods, again for technical reasons. so i'm not all that sympathetic to the fact that every once in a while, if inflation is very low, the seniors don't get a boost of 1% or 1.5%. it seems to me there's a little poetic justice here.
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that seniors are essentially living off the incomes of younger workers, which are being transferred to them through the social security trust fund. and, to lighten that burden, it would be better to do it explicitly, and i would say with justice, in other words, increase the burden on seniors who can afford it, and don't increase it on seniors who can't afford it. but barring that, it seems to me, sort of having a zero cpi adjustment for all seniors is not the most desirable way of doing it, but it is desirable anyway. brian: you wrote on june 22 --
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robert: so what happens here, is that if a company offers a generous health insurance plan, the plan is basically the same for executives as it is for lower paid workers. but if you are making $40,000, $50,000, getting a health insurance policy of $10,000, $15,000, depending on whether you are single or have a family, that is a larger part of your compensation than for a top executive, who is making $150,000, $200,000. so, the wage gap just grows, because to provide this health insurance you are substituting health insurance for take-home pay, and health insurance, health insurance looms larger for smaller, lower paid workers than it does for higher paid workers. brian: i want to put a chart up showing health and human services budgets since 2009. they started out with a budget
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of $737 billion, and $412 billion of that was medicare. you can see what happens through the years. it is all the way up to 2016, where where it's $1.1 trillion for health and human services budget, and $583 billion for medicare. but if you drop back from all this, about 85% of the hhs budget is medicare and medicaid. robert: again, if you look at this, it just shows, without having, it shows the shift of priorities away from military spending. if you go back to the 1950's, military spending was roughly half of the budget. if you come forward today, it's less the in 20% of the budget, i think it is rounded now around 15%. and if you look at the medicare number, $583 billion, that is roughly the same size of the defense department budget.
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if you add in social security, it's almost $900 billion, and a good chunk of medicaid goes to older people as well, so you are talking about numbers approaching $2 trillion, for social security, medicare, and medicaid for the elderly, whereas the defense budget now is around $600 billion. so there has been a true medic -- dramatic change in the priorities of the national government, and i'm not saying we should not have had a major shift, but i think we have gone too far. brian: let me show you home ownership rates. in other words, the number of people who either own or are buying homes. 2009, 67.4%. it has moved steadily down to 63.2%, one of the lowest in a lot of years. what do you take from that? robert: well, i think at its high point it was almost 69%, and there was a bipartisan consensus from both republicans and democrats that owning a home was a good thing.
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that society, the government ought to promote it, and the government did promote it. in addition to which, there were, in sort of the boom of the early 2000's, there was a lot of cheap money around, people were offering mortgages to people who should not have had them. so we got a blip in homeownership, well above where it should be. when you look at that, you think, two thirds of americans are getting homes, but it's a little misleading, because you are also counting people who are in their early 20's who are too young to buy a home, really, who don't want to buy a home, are probably not married or whatever, and also looking at people who are late in life, who may no longer want to live in a home, or may no longer be capable of owning a home. if you take people who are 70 or 80, homeownership's every high, above 80%. in my recollection.
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but what we see in that table, the government's ill-advised, ill-fated effort to sort of promote homeownership, and the sort of cultural belief that you had to own a home to be part of the middle class. brian: here is a chart of the 30 year fixed mortgage rate as mr. - obama has been president. it was 4% when he came into office. it went down to 4.6%, 4.5%, 3.6%, and now it is, in 2015 it was 3.85%, and it is so very, -- low.als what do you make of this? robert: well, with a rate this low, you would think everybody in the country would, at least everybody who was working in the country, would want to own a home, take out a mortgage. but credit is tighter than these numbers indicate, because in the wake of the housing crisis,
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regulators got tougher and bank -- banks themselves got tougher and mortgage lenders got tougher in approving the loans. so, this is not quite the boost to homeownership that it would appear to be, nor is it quite the boost to residential construction that it would appear to be, because there is sort of a decision being made at the lender's level, we don't want to lend to joe, because joe is not a good credit risk, even though the interest rate is quite low, and they may or may not be right about joe, but there is tightness in the regulations. brian: you have how many kids, and what is the age range? robert: three children, 25 to 31. brian: what would they say about all the stuff you have been talking about here? how is it affecting their lives? robert: i don't know what they would say. but they don't read my column very much. i have written a couple books, and none of them have read the books yet. i'm hoping at some point to have them read the books.
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i think, they are quite independent, and, to the extent that i can tell, they consider me old-fashioned, basically. but they are all reasonably optimistic, and they are all reasonably self-sufficient. i am proud of how independent they are. brian: so if someone wants to read your past or future columns, where do they find them? robert: go to the washington post website and look under "opinions," and if they scroll all the way down, to my name, at the end there will be a long list of opinion writers for the post website, and my name is there, and they can click on that. and read as much as they want. brian: and you write two a week. robert: two every week. brian: how many words are you allowed to have? robert: 800. that's it. brian: and if it's over, they
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cut it? robert: i cut it. i mean i made an agreement with , my editor that it would be 800. i don't go to 801. i go to 800. brian: robert samuelson, columnist for the "washington post," thank you for talking about the numbers in your previous columns. we really appreciate it. robert: well, thank you brian. it is always a pleasure. ♪ [captions copyright national cable satellite corp. 2016] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit] announcer: for free transcripts for to give us your comments about this program, visit us at programs are also available as c-span podcasts. ♪
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announcer: if you enjoyed this week's q&a interview with robert samuelson, here are some other programs you might like. robert to gordon talked about his book "the rise and fall of american growth, on the american standard of living between 1870 and 1970." david stockman, former office of management and budget director, on his book "the great d formation, the corruption of capitalism in america." and the former director of the congressional budget office on the state of the federal budget and the economy. you can watch these anytime, or search our entire video library, at >> next, we are locked with your calls and comments on washington journal. eastern, thethe house begins its business. legislative business begins at 2:00 p.m.
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